M/S VR HYDROCHEM PVT. LIMITED  Vs M/S RUPANA PAPER MILLS LIMITEDJudgment by Delhi High Court

$~C28 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 12th March, 2024 + CO.PET. 210/2014 M/S VR HYDROCHEM PVT. LIMITED ….. Petitioner Through: versus M/S RUPANA PAPER MILLS LIMITED ….. Respondent Through: Ms. Isha Khanna, Standing Counsel for OL CORAM: HON’BLE MR. JUSTICE DHARMESH SHARMA DHARMESH SHARMA, J. (ORAL) CO.PET. 210/2014 & CO.APPL. 316/2024 (Under Section 481 of Companies Act, 1956)
1. This application, bearing CO.APPL. 318/2024 has been preferred on behalf of the Official Liquidator under Section 481 of the Companies Act, 1956, seeking dissolution of the company (in liquidation) � M/s. Rupana Paper Mills Limited, and praying that the Official Liquidator be discharged as the Liquidator of the Company. It is further prayed that the Official Liquidator be exempted from carrying out the publication of the citation of final winding up.

2. The above-mentioned application has been moved in the present company petition, which has been instituted under Sections 433(e) and 434 of the Companies Act, 1956 seeking winding up of the respondent/company (in liquidation) on the ground of non-payment of

outstanding dues amounting to Rs. 18,77,383.22/- which arose on account of certain purchase orders and invoices raised by the petitioner for the supply of paper chemicals to the respondent/company (in liquidation).

3. The company (in liquidation) was ordered to be wound up provisionally vide order dated 05.02.2016 and the Official Liquidator attached to this court was appointed as the Provisional Liquidator of the respondent company with the direction to take possession of the assets, books of accounts and records of the company. It appears that said order was stayed vide order of this Court dated 18.03.2016 in view of the pendency of proceedings before the BIFR. However, subsequently the stay granted on 18.03.2016 was vacated vide order dated 20.07.2017 and the Official Liquidator was directed to comply with the directions passed in the earlier order dated 05.02.2016. Thereafter, the citations of winding up were published in the �Business Standard” (English) and �Jansatta” (Hindi) on 15.06.2018 as also in the Delhi Gazette on 11.10.2018.

4. It is stated that as per the record of the Registrar of Companies, the following persons were shown to be the Ex-directors of the company (in liquidation):

(i) Prem Kumar Agarwal

No. 52, Suraj Nagar, Pashchim Keshav Path, Sodala, Mansarovar, Jaipur � 302020.
(ii) Murari Lal Agarwal

House No. 05, Road No. 28, East Punjabi Bagh,New Delhi � 110026.
(iii) Rajesh Kumar Agarwal

No. 1103/04, Brookhill,
G.B.Road, Hiranandani Estate, Thane -West Thane 400607.
(iv) Suresh Kumar Agarwal

By Pass Road, Chas, Bokaro Steel City, Jharkhand � 827013.
5. The record of the Registrar of Companies also reflects that the Registered Office of the company (in liquidation) was situated at IV/928, First Floor & Second Floor, Chotta Chippiwara, Chawri Bazar, Delhi � 110006. The office of the Official Liquidator visited the said premises on 31.08.2017 and duly sealed the same by placing the official seal of the Official Liquidator on the existing locks and pasted notices as provided for under Section 456 of the Companies Act, 1956. It is stated that apart from some assets and goods, no records or books of accounts were recovered from the registered office of the company (in liquidation). As regards the factory premises of the company (in liquidation), it is stated the same was situated at Village Bir Plasi, HB No. 101, Pargana Plasi, Tehsil Nalagarh, Solan, Himachal Pradesh; and on site visit it was found that possession of the said premises had already been taken by Punjab National Bank, Chandigarh under the SARFAESI Act, 2002, prior to passing of the order of winding up by this Court.

6. From a perusal of the record, it is borne out that Punjab National Bank moved an application bearing CO.APPL.1051/2017 seeking leave of this Court to continue proceedings against the company (in liquidation) under the SARFAESI Act, 2002 and the same came to be allowed vide order of this Court dated 03.04.2018. Further, as per the reply dated 11.09.2023 filed by Punjab National

Bank, the properties of the company (in liquidation) were mortgaged with the bank since 24.12.2004 and possession was taken on 18.12.2015, prior to the appointment of the Official Liquidator on 05.02.2016. It was also contended that being a secured creditor, Punjab National Bank had first charge over the mortgaged property. Further, in compliance with the order dated 03.04.2018, an amount of Rs. 3,46,04,034/- was placed in an FDR towards the future claims of workmen. However, it is stated that no claims were received by the Bank.

7. As regards the properties and assets of the company (in liquidation), Sh. M.L. Agarwal placed a reply dated 30.11.2023 in respect of the Statement of Affairs of the company (in liquidation), wherein it is stated that all the properties in the name of the company were mortgaged with Punjab National Bank and Indian Overseas Bank, and such properties came to be auctioned by said Banks. Further, the registered office, which was owned by the wives of the Ex-directors, was also mortgaged with the above-noted Banks. Additionally, it is stated therein that the Ex-directors hold no cash in hand.

8. It is stated on behalf of the Official Liquidator that in compliance with the order of this Court dated 06.02.2019, claims from creditors were invited and notice of the same was published in the newspapers namely �Hindustan Times” (English) (Delhi Edition) and �Amar Ujala” (Hindi) (Sirmour Edition) on 14.05.2019. However, only one claim was received, which claim was made by an unsecured creditor for an amount of Rs. 15,70,529/- and such claim could not be

disbursed due to insufficiency of funds. It is further stated that no claims were received from any statutory authorities.

9. Presently, it has been submitted that the funds position of the company is Rs. (-) 1,31,193.50/- as on 28.01.2024. Further, the Official Liquidator is not seized of any assets either movable or immovable, from which any money may be recovered, and there are no more assets to be realised from the company (in liquidation). Therefore, no useful purpose would be served in continuing the present winding up proceedings.

10. At this juncture, it is expedient to consider the decision in Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti & Ors.1 whereby the Supreme Court inter alia held as under:-

1 (2007) 7 SCC 753

�When the affairs of the Company have been completely wound up or the court finds that the Official Liquidator cannot proceed with the winding up of the Company for want of funds or for any other reason, the court can make an order dissolving the Company from the date of that order. This puts an end to the winding up process.�
11. It would also be relevant to reproduce Section 481 of the Act, which provides for dissolution of a company under such circumstances as are prevailing in the present matter, and the relevant portion of the same reads as under:

�Section 481. Dissolution of company.
(1) When the affairs of a company have been completely wound up or when the Court is of the opinion that the liquidator cannot proceed with the winding up of a company for want of funds and assets or for any of the reason whatsoever and it is just and reasonable in the circumstances of the case that an order of dissolution of the company should be made, the Court shall make
an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly.� …….
12. In view of the above-mentioned decision of the Supreme Court in Meghal Homes (supra), as well as keeping in mind the import of Section 481 (1) of the Act and the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end and therefore, the company (in liquidation) – M/s. Rupana Paper Mills Limited, stands dissolved and the Official Liquidator is hereby discharged. As by way of the present application, the Official Liquidator has sought to be exempt from carrying out the publication of the citation of the final winding up, the same is allowed and such exemption from publication is granted.

13. Further, the Official Liquidator is permitted to close the books of accounts of the company after adjusting expenses and losses from the Common Pool Fund.

14. A copy of this Judgment be communicated to the Registrar of Companies within 30 days by the Official Liquidator.

15. Accordingly, the present company petition along with pending applications, if any, stand disposed of.

16. The next date of hearing i.e., 30.04.2024 stands cancelled.

CCP.(CO) 4/2019
17. List on the date already fixed i.e. 30.04.2024.

DHARMESH SHARMA, J. MARCH 12, 2024 ck